The potential of bone marrow-derived mesenchymal stem cells (MSC) in regenerative medicine is increasingly gaining attention. Among different tissues that can be regenerated using MSC, bone has greater potential for reasons including: MSC are the progenitor cells for bone-forming osteoblasts, and bone is the natural niche for MSC in the body. Thus, development of strategies to optimally use MSC should realize their potential in bone defects that are normally difficult to treat. One of the major problems in skeletal defects is the delayed healing or non-union of bone fractures. Demographic data reveal that due to the steadily rising age of the population, complications with the musculoskeletal system will increase during the coming years. Each year in the United States, there is an estimated six million fractures of which about 10% become non-union. Thus, new therapeutic approaches to successfully address this problem will hugely benefit health care and the economy. It is evident that the majority of aseptic non-union fractures require a variable degree of biological enhancement. Thus, new therapeutic approaches coupling angiogenesis to osteogenesis using MSC as genetically-engineered stem cell source will greatly advance patient management and reduce morbidity and economic burden. Despite the regenerative potential of MSC, one of the limitations in MSC therapy is target- specific homing of transplanted cells in vivo. We recently developed a method to enhance bone-specific homing of MSC by transient, ectopic expression of 1421 integrin. This strategy not only resulted in a significant increase in MSC homed to bone, but also greatly reduced the entrapment of MSC in the lungs. Using this targeting approach, we recently demonstrated that MSC, genetically-engineered to produce BMP2, significantly improved bone density during first few months in a mouse model of osteoporosis. Additional preliminary studies in a segmental bone defect from our lab using genetically-engineered MSC expressing VEGF demonstrated significant vascular remodeling. Results from these studies provide unique direction for the development of a new therapeutic approach for non-union fractures. In complicated fractures and non- unions, another reason that limits effective osteoinduction is the lack of MSC in sufficient numbers. Thus, strategies to enrich the MSC endogenously through peripheral mobilization and proliferation would greatly augment ossification. Such an approach will be ideal to treat non-union fractures and multiple fractures, which are also commonly encountered in patients with osteoporosis. An added advantage to the use of endogenous MSC in these pathologies is associated vascular damage, since MSC have also been shown to be effective in vascular regeneration. Combining these two aspects, the aims of the proposed studies is to test the effects of targeted stem cell therapy, coupling osteogenic and angiogenic inducers for non-union fractures in a preclinical mouse model, and to determine the therapeutic potential of peripheral mobilization and proliferation of endogenous MSC using growth factors and mobilization-inducing compounds. A positive outcome of these studies could lead to the development of new and effective treatment strategies for bone repair.